Energy News Beat

Kamala Harris and the Democrats have gone strangely silent about the ‘climate crisis’ they warned was an existential threat a few years ago.

Don’t look now, but the “climate crisis” is officially over. No need to take my word for it. Just ask the Democratic Party’s new standard bearer, Vice President Kamala Harris, who mentioned the topic “just once” in her acceptance speech at the recent Democratic National Convention, according to The New York Times. [emphasis, links added]

The Times also noted that Harris “has not offered any new policies for addressing climate change.”

How far we have come in five short years. In 2019 before COVID, inflation, and antisemitic demonstrations on college campuses were the big issues of the day, America was prospering amid political calmness.

With [the 2020] presidential campaign beginning, Democratic candidates and their allies in the corporate press needed to talk about something, so they chose climate change. CNN even dedicated seven hours to a “climate crisis town hall.”

Every candidate seeking the Democratic nomination, including Harris, warned of the dangers posed by climate change. She dubbed the matter, “an existential threat to who we are as human beings” and announced she was “prepared to get rid of the filibuster to pass a Green New Deal.” No ambiguity there.

Fast forward to today, and the existential crisis is ignored. Wherever one lands on the climate change spectrum, the contradiction is hard to miss. What was once the biggest issue is now a non-issue, and there are three possible explanations.

The first is cynical: climate change was never a crisis but an opportunity. Gas prices were in the $2 a gallon range nationwide. The inflation rate was 1.7 percent. There were no wars in Ukraine or Israel. President Donald Trump enjoyed both popularity and success.

Democrats needed an issue they could own. They needed a crisis to convince voters they deserved power.

Labeling climate change “existential” gave it gravity and academic loftiness: Climate change is an enormous threat and only we are smart enough to realize it. Trump is too brash, too troglodytic, to care about something as esoteric yet profoundly serious as climate change. This was their plan.

Inventing a crisis with solutions that would upend everyday life — no more combustible engines or red meat — just to win votes is very cynical, but it’s what Democrats did.

The second reason for ignoring the “climate crisis” this election cycle is not much better: climate change polls poorly.

It ranks as the 19th most important topic with voters in a national poll. Harris’ DNC speech was crafted with polling in mind. “Free Palestine” polls well among their crowd, so it was given attention.

Fear of the mysterious “Project 2025,” supposedly the playbook for Trump and his fellow right-wing extremists, must test well because it was mentioned several times.

This explanation is also concerning because it implies that Harris would rather conceal the truth of an “existential crisis” (her words, not mine) rather than risk losing power.

The left tries to brand “Kamala” as “Momala,” but no mother would hide a health diagnosis of her child rather than risk upsetting him.

If climate change is an existential threat, state it plainly. Past presidential candidates of both political parties did not shy away from the major challenges of their time.

Franklin D. Roosevelt warned against the danger posed by Nazi Germany. Richard Nixon, Jimmy Carter, and Ronald Reagan all spoke of the Soviet threat, believing the American people needed truth, not coddling. The American people deserve the fullness of truth — if their existence is really at risk.

Whether it’s cynicism or naked ambition, the climate issue is manipulated endlessly by people looking for power and money.

The third reason Kalama Harris is giving climate change the back seat is because the problem has been solved. That of course is laughable.

If the Biden-Harris Administration fixed climate change, America would have seen ticker-tape parades and mass celebrations. It would be the number one data point for Harris’s promotion to the presidency.

No, the Biden-Harris Administration did not “fix” the climate, which leaves the previous two options: either Harris disingenuously uses climate change to scare voters into compliance or she ignores the greatest threat of our time because it imperils her political goals.

Both are shameful and belittle the American people. Both represent real “threats to our democracy” for they leave the fullness of truth in the dark. Both are disqualifying.

Of course, Harris herself could tell us why she is suddenly ignoring the climate issue. But there’s no good answer. This is just another example of why she is avoiding the media and the public.

Whether it’s cynicism or naked ambition, the climate issue is manipulated endlessly by people looking for power and money.

This election cycle makes it clear that whatever climate change might be occurring, it certainly is not “existential.” Given her silence on the issue, Harris obviously agrees.

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Battery electric car sales increased by 10.8% in August due to summer discounts and new models.

This growth raised the market share of electric cars to 22.6%.

Sales of petrol and diesel cars dropped by 10.1% and 7.3%, respectively, but these cars still made up 56.8% of new car registrations.

Sales of plug-in hybrids fell by 12.3%, while hybrid electric cars saw a 36.1% rise, holding 13.8% of the market.

The Society of Motor Manufacturers and Traders (SMMT) expects electric car market share to reach 18.5% by the end of the year.

The industry is calling for more support for electric vehicles (EVs), including better public charging infrastructure and incentives for buyers.

Mike Hawes, SMMT Chief Executive, said: “Encouraging a mass market shift to EVs remains a challenge, however, and urgent action must be taken to help buyers overcome affordability issues and concerns about chargepoint provision.”

Kim Royds, mobility director at Centrica, said: “Despite August being typically a quieter month for registrations ahead of new plates in September, it’s encouraging to see EVs buck the trend with adoption levels remaining high.

“To ensure this continues as we head into the Autumn, it’s more pressing than ever that benefits such as unique tariff offerings are introduced to encourage people to make the switch.

“A big part of making the UK’s roads electric is tackling the inequality that exists between at home and public EV charging.

“So many homeowners don’t have access to a driveway and so can’t have easy-to-use private charging to make their electric dream a reality.”

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A new paper finds ocean temperatures, not human-made carbon dioxide emissions, are the primary drivers of atmospheric CO2 changes.

Another day, another new scientific paper has been published reporting efforts to curb anthropogenic CO2 emissions are “meaningless.” [emphasis, links added]

In this study, multiple linear regression analysis was performed comparing SST versus anthropogenic CO2 emissions as explanatory factors and the annual changes in atmospheric CO2 as the objective variable over the period 1959-2022.

The model using the SSTs (NASA, NOAA, UAH) best explained the annual CO2 change (regression coefficient B = 2.406, P = <0.0002).

In contrast, human emissions were not shown to be an explanatory factor at all in annual CO2 changes (regression coefficient B = 0.0027, P = 0.863).

Most impressively, the predicted atmospheric CO2 concentration using the regression equation derived from 1960-2022 SSTs had an extremely high correlation coefficient of r = 0.9995.

“The main factor governing the annual increase in atmospheric CO2 concentration is the SST [sea surface temperature] rather than human emissions.” –Ato, 2024

Thus, not only is the paradigm that says humans drive atmospheric CO2 changes wrong but “the theory that global warming and climate change are caused by human-emitted CO2 is also wrong.”

This is not the first study to address the lack of correlation between annual changes in atmospheric CO2 and anthropogenic CO2 emissions.

Wang et al. (2013) assessed that CO2 emissions derived from human activity (fossil fuel combustion and land use changes) only account for about +0.1 to 0.3 PgC/yr of the annual change in CO2 concentration.

This is roughly “10% of the variance (σ²) of the CO2 growth rate.”

Jones and Cox (2005) have pointed out that the changes associated with annual fossil fuel emissions are unlikely to explain CO2 growth rate anomalies.

“…it is unlikely that these anomalies can be explained by an abrupt increase in anthropogenic emissions, as the anomalies are much larger than annual increases in fossil fuel emissions.”

Dr. Jari Ahlbeck (2009) also assessed the correlation between fossil fuel emissions and the increase in CO2 growth rates as “clearly statistically insignificant.”

He therefore excluded this factor from consideration in his analysis of the mechanisms of CO2 variability.

A chart included in the body of the paper reveals five-year periods where there was either a decline in the annual CO2 emissions trend (5.33, 5.17, 5.13, 5.11, 5.29 GtC/yr for 1980-1984) or a flattened trend (6.40, 6.53, 6.63, 6.59, 6.57 GtC/yr for 1995-1999).

Even an analysis detailed in the Carbon Brief blog from a few years ago suggests “global CO2 emissions have been flat – if not slightly declining – over the past 10 years.”

This does not support the conclusion that an increase in the CO2 growth rate has been driven by flat to declining human emissions.

An additional side note found in the Ato paper addresses the lack of a link between human methane emissions and atmospheric methane growth rates.

Although human methane emissions have risen dramatically in recent decades, “atmospheric methane concentrations have declined since the 21st century.”

So we not only have a lack of correlation between human emissions and annual variations in atmospheric CO2 (and CH4), but we even have flat to declining trends in annual anthropogenic CO2 (and CH4) emissions in recent decades – the opposite explanatory directionality.

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OPEC+ Close to Delaying Oil Supply Increase, Delegates Say

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Thursday, September 5th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up OPEC close to delaying oil supply increase, according to Galligan. We’ll talk about a 180 there. Mixed up facts and speculation about the state of the Russian Indo financial ties. Ooh spicy. Ooh. We’ll explain what that has to do with energy. Trust me. Next up rare metals prices surge as China restricts exports. Interesting. Very spicy there. Next up. Efficiency in capacity markets, not capital markets. [00:00:48][38.4]

Stuart Turley: [00:00:49] Capacity. [00:00:49][0.0]

Michael Tanner: [00:00:51] Absolutely. Next up the invasion of the Water Snatchers. Talk about some great headlines this day. Next up, he will then toss over to me. I will quickly cover what happened in the oil and gas markets. Crude oil down again. We’re below $70. Yikes. And then we went ahead and saw a new M&A deal. Strikethrough. Crescent energy buys Cheyenne Petroleum’s Eagle Ford assets for $168 million. I will cover all that in a bag of chips, guys. As always, I am Michael Tanner, joined by Stuart Turley. Where do you want to begin? [00:01:22][31.3]

Stuart Turley: [00:01:23] Hey, we’re just getting started here with OPEC. Michael, this has been fun. The Bulls and the bears have been running amuck. You know who’s going to win. On whether or not OPEC is going to happen I saw this one OPEC plus close to delaying the oil supply at the time we’re recording. This oil has been hammered pretty brutally. The group is scheduled for October production boost or increase of 180,000 barrels. But now they’re rethinking it because of the data from China. I thought that was pretty interesting. Here is a quote from Bob McNally. OPEC is facing a binary choice between delaying, tapering and enduring a disorderly crude price rout, said Bob McNally, president and consultant of Wrap in Energy Group, a former white House official. It appears to be leaning toward the former, as he’s always cautioned it would be the case. [00:02:18][54.7]

Michael Tanner: [00:02:18] Yeah, it’s I mean, we’ve kind of seen the 180 on this. I think it’s because they saw Brant oil prices. You know, as we as we sit here, Brant oil prices have dipped to to pretty low. I mean you’re talking about $73 Brant which is not nearly what they need now. I think the entire breakeven oil price charade that Saudi needs yes, they need higher oil prices. They can also just roll back a lot of their spending, which people don’t know about. [00:02:42][23.9]

Stuart Turley: [00:02:42] Right? You bet. And so now Ananias has been saying that that’s the sweet spot. So it’s kind of funny that they’re rolling right on in the sweet spot. [00:02:52][9.2]

Michael Tanner: [00:02:52] Yeah. But you know, the 180 I think comes which obviously they would like higher prices. I think you know, it’s it clearly shows that the market is on a little bit more of a tenuous situation than I think anybody wants to admit. So it’ll be interesting to see how this plays out. And we will be watching very closely this next OPEC meeting coming up. [00:03:12][19.7]

Stuart Turley: [00:03:12] Oh, absolutely. Four years ago, do you remember the OPEC you and I were pretending we were at that was a funny video that we we made where we were like all in there on the zoom. [00:03:21][8.5]

Michael Tanner: [00:03:21] And we know it was that was great. [00:03:22][0.9]

Stuart Turley: [00:03:23] Anyway, that was that was one of the old fun days. Okay. Facts and speculation about the state of the Russia Indo financial ties. This is from our buddy over there at Andrew Corby. Oh, Substack. He sent this over and it’s pretty interesting. And that Russia and India ways doable proposal on the swift alternative which is the BRICs bring. But this is the first time they’re actually including oil in there. And so that is why that is in here. The first revealed aspirin handled 70% of Russia’s $65 billion worth of trade of India last year, mostly Russian energy exports. This is really huge. [00:04:11][48.2]

Michael Tanner: [00:04:12] Yeah, it’s it’s really big. I mean, the fact that this is you know, I it again it comes back to it’s clear sanctions don’t work. [00:04:19][6.8]

Stuart Turley: [00:04:19] No. Especially because people need oil and they’re going to get it by hook or by crook. I’m happy for them. And they’re buying it, you know, below or outside of sanctions. More power to them. Power to their people. [00:04:32][12.8]

Michael Tanner: [00:04:32] What a novel cause. Countries looking out for their own interests. [00:04:35][2.7]

Stuart Turley: [00:04:36] Yeah. Wow. Let’s go to the next one here. Rare metals price surges China restricts exports. Now Michael this is in the critical minerals area. You being a mines guy antimony is not what you pay after you get divorced. Antimony is actually what they use for military, automotive and solar applications, with China producing nearly half of the global supply. Michael, that is not now they’re going. To say this is quote from London. It’s a sign of the times. Military uses of SB antimony are now the tail side, the tail that wags the dog. Everyone needs it for armament, so it’s better to hang on to it than sell it. You don’t want your other your opponents having it. [00:05:26][50.4]

Michael Tanner: [00:05:27] No, absolutely. I mean, I love first off this this article is titled correctly, Rare metals not critical metals because right. There’s there’s a difference. There is it’s really critical minerals versus metals per se. But you know, it’s it’s absolutely going to be pretty crazy when China and now Russia who have both gone in to all of these countries, including now Afghanistan and hoovered up all of the critical mineral minerals and metals that are needed to make EVs and selling it to us as a premium. And then we all turn around and say, look how green we are. [00:06:00][33.5]

Stuart Turley: [00:06:01] And we’re not used to this. Last year, China issued three batches of rare earth output quotas, the first time it issued that more than many quotas in a single year since it started the quota system. It’s pretty nuts. Yeah, and it just means that if we don’t get our regulatory issues, we our regulatory issues cost us over $1 trillion this year, because if we don’t get our regulatory mining issues under control, we won’t have an energy transition. [00:06:34][33.3]

Michael Tanner: [00:06:35] Yeah. I was listening to a podcast this morning with Cash Patel, who’s an adviser to President Trump and somebody who’s a former chief of staff to the secretary of defense. And he said, it’s the model. You know, these minerals, lithium, cobalt. And they’re all the modern day blood diamonds. [00:06:49][14.0]

Stuart Turley: [00:06:50] That’s exactly right. And but you gotta have it for energy because. [00:06:53][3.4]

Michael Tanner: [00:06:54] It’s necessary, don’t get me wrong. [00:06:55][1.2]

Stuart Turley: [00:06:55] But and you’re not going to grow the grid twice. I mean, we’re supposed to double the the Texas grid in five years. Without this, it takes 20 to get a mine open. It ain’t going to happen. All right, all right, what’s next? Let’s go to. Are you ready for this Substack author? Okay, this one is the electric grandma. I swear I’m not making this up. Meredith Angwin I love Meredith. And when she is now the electric grandma on her Substack. Yeah. Let’s go to this efficiency and capacity market. On July 29th, Ethan Howard at the Utility Dive looked at the probable outcome of the next capacity auction. PJM capacity prices could jump 157%. Morgan Stanley the price raise in the auction started at a low base, starting at $29 per megawatt day, the $270 per megawatt day. Holy smokes. [00:07:57][61.6]

Michael Tanner: [00:07:58] It’s it’s absolutely insane. I mean, you’re talking about a that’s 157% increase. [00:08:05][6.5]

Stuart Turley: [00:08:05] It is. It’s just nuts. You know PJM is just sitting there. You’ve got it. When energy efficiency was added to the forecast and E was removed from the capacity market, PJM should have simply followed the tariff, recognize that E was not capacity, and recognize that E sources do not meet the definition of E resources filed in it. Instead, PJM recognizes that E resources are not capacity stopped, including E resources in the capacity act, and and began to pay e resources on uplift payment. I would I mean the accounting on this thing is just absolutely hilarious. Way to go Meredith thing when in a way she explains this out. [00:08:52][46.5]

Michael Tanner: [00:08:52] Yeah. No. That’s awesome. All right, let’s go to this last one, invasion of the Water Snatchers. [00:08:56][4.2]

Stuart Turley: [00:08:57] You’re gonna love this one. Speaking. We’re having a trifecta. Today is Substack trifecta. This is from Robert Bryce, and he brought it up on his Substack. This is about stealing land for hydrogen in Texas, where they need the water, and they’re going to absolutely obliterate the water in order to get the hydrogen. I mean, you can’t make this up. It’s your county known in the side. Read on on County Road 339. Apex Clean Energy, a subsidiary of Areas Management Corporation, a publicly traded firm based in Los Angeles, would then please go back to Los Angeles and leave Texas alone if the project is known as Big Trail reportedly aims to lease 280,000 acres of land and install also 3200MW of alt energy capacity. This is actually out of the the hydrogen and wind energy as well too. Robert brings us up a great point. Hydrogen is so much more expensive than natural gas. You’re wasting money by doing this and trying to pretend that you’re bringing in a natural gas plant. [00:10:16][78.2]

Michael Tanner: [00:10:17] I mean, I love this quote here from that image. Show me the incentives and I’ll show you the outcome. [00:10:21][3.9]

Stuart Turley: [00:10:21] And then. Great. [00:10:22][0.3]

Michael Tanner: [00:10:22] It’s really great. [00:10:23][0.9]

Stuart Turley: [00:10:24] They’ll produce less energy than a single new barrel of oil in the Permian Basin. [00:10:28][4.5]

Michael Tanner: [00:10:29] I mean, it’s it’s it’s pretty, it’s pretty. It’s pretty insane. That’s a great quote, by the way. [00:10:34][5.7]

Stuart Turley: [00:10:35] Do I know. [00:10:35][0.4]

Michael Tanner: [00:10:36] That? Show me the incentives and I’ll show you the outcome. That’s a Charlie Munger quote. [00:10:39][3.3]

Stuart Turley: [00:10:39] Okay. Love it. But I’ll tell you when you sit back. And Robert Price on his his Substack and Martha Ng went on her Substack, she has referred a lot of people to our Substack. So we love her Substack, and that’ll be in the show notes. So shout out to all three of our Substack authors today. [00:10:57][17.5]

Michael Tanner: [00:10:57] Yeah. No. Absolutely. Well, let’s go ahead and jump over to the broader markets, guys. Before we do that, as always, we got to pay the bills. Thank you for checking us out on the world’s greatest website. energy news beat.com. The best place for all your energy and oil and gas news doing the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Hit that description below for all links to the timestamps links to the articles. Check us out on Substack. The Energy News beats substack.com, and you can also check out Invest in Oil.energy News beat.com. If you want to get involved in an awesome oil and gas direct working and just projects that we are partnering up with the team over at Pecos Operating. So hit us up. That’s invest in oil dot energy news b.com or hit the link in the description below. [00:11:44][47.0]

Michael Tanner: [00:11:45] I mean pretty market’s again a pretty tough stew. We’re talking you know overall markets were still down S&P 500 down about a quarter of a percent. Or about you know a 10th of a percentage point Nasdaq down about a quarter of a percentage point two year yields actually up a quarter of a percentage point ten year yields basically flat dollar index down about a half a percentage point. Bitcoin up about a four percentage point still under 60,000 58,000. Even right now. Crude oil not a great day. Down another 1.2 or down another 1.6 percentage points at 6920. Brant oil down about a full percentage point 7360. Natural gas down two percentage points $2 and 40 or $0.14. So pretty unbelievable. I mean obviously, you know, you’ve got what’s going on with OPEC. You know a lot of this now comes back to the demand issues. You know obviously Libya coming back online. But again as we covered yesterday that’s all smoke and mirrors from the fact that it was never going to be off line fully in the first spot. So why would they be. Why why would they be I again it’s, it’s, it’s, it’s it’s what concerns and always bugs me a little bit with what a lot of what people talk about when they try to say where prices are going is they pick a narrative that they already have, and they all sit out there and say, well, this is why it’s going down. I say, let’s, let’s actually think for a little while. Let’s use our noggins. Let’s think before we just blather out the answer. I thought the interesting side of the coin. AP estimated crude oil inventory reserves at a 7.4 million barrel draw, and oil prices haven’t changed much. So it goes to show you right, there is a pretty, pretty interesting correlation where the amount of inventories we have is being is is currently less and less correlated with where prices are going. And I saw an interesting post over there from Eric Patel on Twitter. I don’t have it up in front of me, but he basically showed the historical yearly averages of where inventories are and what the oil price was, where the at, what levels those inventories was at, and we were at the lowest level of inventories we have been in five years, and the price is lower than it has been in any of those five years outside if you remove Covid. So obviously the amount of inventories is becoming less and less correlated to where prices are going. [00:13:57][132.7]

Stuart Turley: [00:13:58] Exactly. In fact, Josh Young and David Blackman and I had a podcast where we talked about that and we were kind of like the old pricing matrices is changed. It’s not just supply and demand anymore. [00:14:09][11.3]

Michael Tanner: [00:14:10] No, it’s absolutely true. Other thing that happened today, guys, Crescent energy announced a acquisition in the Eagle for Eagle Ford, a traditional quote unquote bolt on acquisition. They go ahead and swoop up Cheyenne Petroleum’s Eagle for two assets for a cool $168 million. You know, it’s directly offset from its current existing Eagle Ford stuff and also builds upon the acquisition that they made with in buying Silver Bow. I remember that happened at the beginning of the year. Pretty interesting. They decided to use a mosaic or multiple on invested capital as their main, you know, main financial metric to evaluate this deal. They did that at a 2.0, which is interesting. Usually we’ve seen EBITDA being used, but they go ahead and use mosaic or see as the specific thing. You know, it’s a bunch of low decline current producing stuff in Rio at a I’ll, I’ll Tosca, LaSalle and McMullen counties with about 30 quote unquote locations of. I love how they say oil weighted core development locations. There’s also about 5300 net royalty acres available with that, so you get a little bit of both. You know they they’ve got a really nice this this kind of keeps their their balance sheet where it’s at. Cheyenne Petroleum. This is a nugget that good old our friend on Twitter Clint Barnett, figured out he was the one that actually figured out that Cheyenne Petroleum was the one shedding these assets. He also chose to point out, if we can bring this tweet up here that looks like it looks like Cheyenne is also trying to shed its Oklahoma stuff to Valdez. So we’ll see if that goes ahead and takes place. Valdez has been pretty active in the space as of recently. They went ahead recently and just swooped up a Citizen Petroleum that took place at the end of 2023. So M&A you know nice little M&A deal for us a little bit smaller. Again this is a complete acquisition. Get Cheyenne Petroleum who’s based out of Oklahoma City been around since 1973. So good for them for going ahead and getting out of there. But nice to see the M&A market still still hopping and hollering like it did. What else do you have for us? [00:16:08][118.4]

Stuart Turley: [00:16:08] Oh not much. Just buckle. [00:16:09][1.0]

Michael Tanner: [00:16:10] Up. It’s going to be great white guys. Well with that we appreciate you sticking with us this entire week. Who do you got on the show tomorrow? Who you dropping? [00:16:17][7.0]

Stuart Turley: [00:16:18] Oh, it’s going to be savage, Mr. Savage. The love, the savage path. He is a cool cat. I had a great conversation with him, and he’s a energy guy out of Houston, so it’ll be rolling out in the morning. [00:16:33][15.2]

Michael Tanner: [00:16:33] Absolutely. Love that. Love us some good. David Savage, you’ll hear the weekly recap. Then on Saturday we’ll take Sunday off and we’ll be back in the chair come Monday morning. So guys with that have a great week and we appreciate you sticking with us for Stuart Turley I’m Mike Tanner. We’ll see you next week. [00:16:33][0.0][958.9]

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Energy News Beat

HOUSTON, Sept 4 (Reuters) – Crude futures fell by more than $1 a barrel on Wednesday in see-saw trading, with traders worried about demand in coming months as crude producers offered mixed signals about supply increases.

Brent crude futures settled down $1.05, or 1.42%, to $72.70 a barrel. U.S. West Texas Intermediate crude futures settled down $1.14, or 1.62%, at $69.20.

During the session, both benchmarks swung from $1 down to $1 up following news OPEC+ was discussing delaying a possible output increase because Libyan production is expected to rise.

In a broader sell-off, Brent crude futures tumbled as much as 11%, or about $9, in a little over a week, hitting a low of $72.63 on Wednesday.

Lackluster data from the U.S. and China reinforced expectations of a weaker global economy and oil demand, helping set off a broader decline in world markets.

“It’s definitely worries about a slowdown in manufacturing,” said Phil Flynn, senior analyst at Price Futures Group. “That’s the only negative we’re seeing.”

Meanwhile, traders believed there could be an end in sight to a dispute halting Libyan oil exports, which would bring more crude supply back online.

“This sell off moved the attention to what OPEC+’s response would be, which last week looked set to start the planned output hikes in October,” wrote Alex Hodes, analyst at StoneX. “The group is now concerned about pricing and sources say that a delay to the hikes is now being discussed.”

Recent data releases fed concerns of weak demand from China, the world’s biggest crude importer, and U.S. consumption taking a hit.

On Saturday, Chinese data showed manufacturing activity sank to a six-month low in August, when growth in new home prices slowed.

On Tuesday in the U.S., the Institute for Supply Management data showed manufacturing remained subdued.

Weekly U.S. oil inventory data was delayed by Monday’s Labor Day holiday. The report from the American Petroleum Institute is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and data from the U.S. Energy Information Administration will be published at 11:00 a.m. EDT (1500 GMT) on Thursday.

U.S. crude and gasoline stockpiles were expected to have fallen last week, a preliminary Reuters poll showed.

While traders were pessimistic on demand fears, changes in supply could easily change sentiments, Flynn said.

“We could flip on a dime,” he said. “It could very easily turn positive. We could see a pretty decent crude draw later today.”

Source: Reuters.com

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HOUSTON, Sep. 04 /BusinessWire/ — Crescent Energy Company (NYSE:CRGY) (“Crescent” or the “Company”) today announced the signing of a definitive agreement to acquire assets from a private Eagle Ford operator for total cash consideration of $168 million, subject to customary purchase price adjustments. The acquisition is directly offset Crescent’s existing Central Eagle Ford footprint and builds upon its significant acquisition activity in the Eagle Ford over the past 18 months, including the recently closed acquisition of SilverBow Resources Inc. The transaction, which has an effective date of May 1, is expected to close in September 2024, subject to customary closing conditions. Additional details have been posted on Crescent’s website at www.crescentenergyco.com.

HIGHLIGHTS

Strong investment returns and accretive to key financial metrics – The transaction is accretive to Operating Cash Flow, Levered Free Cash Flow(1) and net asset value per share, with unlevered cash-on-cash returns in excess of Crescent’s 2.0x Multiple on Invested Capital (“MOIC”) target
Complementary operations directly offset core position – Low-decline oil production with attractive inventory directly offset Crescent’s existing footprint in Frio, Atascosa, La Salle and McMullen counties with potential for meaningful operating efficiencies and extended lateral lengths across Crescent’s existing position
High-return drilling inventory; immediately competes for capital – Acquisition adds roughly 30 oil-weighted, core development locations with advantaged NRIs from owned minerals further increasing returns
Minerals, surface and midstream ownership enhances flexibility – Approximately 5,300 net royalty acres, greater than 3,500 surface acres and owned takeaway increase margins and create meaningful operating flexibility
Maintains strong balance sheet and Investment Grade credit metrics – Crescent’s leverage ratio is expected to remain relatively unchanged, with net debt to trailing 12-month Adjusted EBITDAX ratio expected to be below the Company’s publicly stated maximum leverage target of 1.5x(2). In conjunction with the signing of the transaction, Crescent entered into additional hedges in-line with its risk-management strategy

“This transaction builds upon our momentum in the Eagle Ford, where we see substantial opportunity for further growth and compelling investment returns,” said Crescent CEO David Rockecharlie. “We are adding low-decline oil production and high-quality acreage adjacent to our existing position, with meaningful opportunity to further increase returns through improved operating efficiency. We are pleased with this attractive acquisition, and we believe in our ability to continue to accretively scale Crescent.”

(1)

Non-GAAP financial measure. Please see “Non-GAAP Measures” for a description of the applicable metric.

(2)

Crescent defines leverage as the ratio of consolidated net debt to consolidated Adjusted EBITDAX (non-GAAP).

About Crescent Energy

Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Our long-life, balanced portfolio combines stable cash flows from low-decline production with deep, high-quality development inventory. Our activities are focused in Texas and the Rocky Mountains. For additional information, please visit www.crescentenergyco.com.

Cautionary Statement Regarding Forward-Looking Information

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on current expectations, including with respect to the proposed transaction. The words and phrases “should”, “could”, “may”, “will”, “believe”, “think”, “plan”, “intend”, “expect”, “potential”, “possible”, “anticipate”, “estimate”, “forecast”, “view”, “efforts”, “target”, “goal” and similar expressions identify forward-looking statements and express the Company’s expectations about future events. All statements, other than statements of historical facts, included in this communication that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the ability of the parties to consummate the transaction in a timely manner or at all; satisfaction of the conditions precedent to consummation of the transaction; the integration of the assets acquired in the transaction into the Company’s existing strategies and plans; the possibility of litigation (including related to the transaction itself), weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil producing countries, the timing and success of business development efforts, and other uncertainties. Consequently, actual future results could differ materially from expectations. The Company assumes no duty to update or revise its forward-looking statements based on new information, future events or otherwise.

Non-GAAP Measures

Crescent defines Levered Free Cash Flow as Adjusted EBITDAX less interest expense, excluding non-cash amortization of deferred financing costs, discounts, and premiums, loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, and premiums, realized loss on interest rate derivatives, current income tax benefit (expense), tax-related redeemable noncontrolling interest distributions made by OpCo and development of oil and natural gas properties. Levered Free Cash Flow does not take into account amounts incurred on acquisitions.

Crescent defines Adjusted EBITDAX as net income (loss) before interest expense, loss from extinguishment of debt, realized (gain) loss on interest rate derivatives, income tax expense (benefit), depreciation, depletion and amortization, exploration expense, non-cash gain (loss) on derivatives, impairment expense, non-cash equity-based compensation expense, (gain) loss on sale of assets, other (income) expense, transaction and nonrecurring expenses and early settlement of derivative contracts. Additionally, we further subtract certain redeemable noncontrolling interest distributions made by Crescent Energy OpCo LLC, our wholly owned subsidiary, related to Manager Compensation to KKR Energy Assets Manager LLC, our external manager, and settlement of acquired derivative contracts.

Source: Rbcrichardsonbarr.com

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The financial dimension of the Russian-Indian Strategic Partnership is qualitatively evolving as a result of the fast-moving multipolar processes that were unleashed across the world by the Ukrainian Conflict.

Russia and India are decades-long strategic partners whose contemporary relations are driven by the shared desire to accelerate tri-multipolarity processes amidst the global systemic transition, which readers can learn more about here, here, and here. This role explains the importance of their ties in today’s world, especially their financial ones, of which there are some facts but plenty of speculation. Here are three relevant reports from earlier this week that’ll then be analyzed in this piece:

* “Exclusive: Russia’s Sberbank says India business booming despite Western sanctions”

* “India weighs Russia’s ‘doable’ proposal on `SWIFT’ alternative”

* “Russia built covert trade channel with India, leaks reveal”

The first revealed that Sberbank handled 70% of Russia’s $65 billion worth of trade with India last year (mostly Russian energy exports) and opened rupee accounts for Russian clients as a means of payment and savings. Its Indian staff has surged by 150% this year alone and “There are no restrictions on its operations” inside the country. Transactions only take several hours to complete, growing Indian exports solved the prior problem of Russia’s enormous rupee stockpile, and more real-sector trade is expected.

As for the second, this concerned Business Line’s report citing unnamed sources that India is seriously considering using Russia’s System for Transfer of Financial Messages (SPFS per its Russian abbreviation). That would facilitate expanding the use of national currencies in trade according to them. In their source’s own words, “Direct settlements in national currencies will not only help in de-dollarisation but also lead to cheaper, quicker and more efficient transactions.”

The third report is the most scandalous since it involves allegedly leaked documents that purport to prove that India has clandestinely become a major source of dual-use technologies for Russia that are paid for in part using digital financial assets. It’s possible that Russia reinvested some of its enormous rupee surplus into such projects, which is its right and India’s to do per their status as sovereign states. If true, then this would make India among Russia’s most important partners anywhere in the world, ever.

Reflecting on these three reports, it can be said with confidence that the financial dimension of the Russian-Indian Strategic Partnership is qualitatively evolving as a result of the fast-moving multipolar processes that were unleashed across the world by the Ukrainian Conflict. They’ve sought to make such progress for years already but hadn’t hitherto been able to do so, yet they’re now finally making up for lost time and at an astronomical pace at that, which speaks to their shared interests in this respect.

India conceptualizes its support of the Russian economy to not only be a friendly gesture that aligns with its own self-explanatory interests, but also as a means of preemptively averting Russia’s potentially disproportionate dependence on China, which the three analyses hyperlinked in the introduction elaborate upon. Russia feels the same way, plus India has reportedly proven itself to be more reliable than China with regards to dual-use technology, at least if that last report is even only partially true.

Considering the strength of Russo-Indo financial ties, including speculation that India is defying the US’ unilateral restrictions on dual-use technology exports to Russia, there’s reason to believe that Russia might make progress on negotiating a gas swap with Iran for supplying India as explained here. If that comes to pass, then those three can supercharge tri-multipolarity processes by pioneering their own pole of influence that could expand to include Afghanistan, Azerbaijan, and the Central Asian Republics.

Source: Andrew Korybko’s Substack Newsletter

The post Facts & Speculation About The State Of Russo-Indo Financial Ties appeared first on Energy News Beat.

 

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China has restricted exports of key rare metals like antimony, causing prices to surge; antimony prices have reached record highs of over $25,000 per tonne.
Antimony is vital for military, automotive, and solar applications, with China producing nearly half of the global supply.
Western rare earth producers face challenges due to China’s market dominance, but new supply chains are being developed in the U.S. and Scandinavia.

Last year, China announced that it would impose restrictions on exports of eight gallium and six germanium products starting August 2023  in retaliation for U.S. imposing trade restrictions and tariffs on Chinese-made products. On August 14, Beijing tightened the noose and announced export restrictions on antimony as part of the country’s latest move to restrict critical mineral shipments. And now prices of antimony and gallium are surging despite the export restrictions having yet to go into effect. Antimony prices have rocketed to an all-time high, with spot prices in China and Europe surpassing $25,000 per tonne, more than double prices at the end of 2023.

Source: Financial Times

China is the world’s largest producer of antimony, accounting for 48% of global mined output. The country’s output in 2023 clocked in at 40,000 tonnes, nearly double Tajikistan’s 21,000 tonnes while Turkey was the third largest producer with 6,000 tonnes. Antimony is considered a strategic metal used in military applications such as ammunition, infrared missiles and nuclear weapons as well as lead-acid storage batteries used in cars and brake pads thanks to its heat resistant properties. Antimony is also widely used in the solar sector to improve transparency for the cover glass on solar cells and is also used in the screens of smartphones.

“It’s a sign of the times. The military uses of Sb (antimony) are now the tail that wags the dog. Everyone needs it for armaments so it is better to hang onto it than sell it. This will put a real squeeze on the U.S. and European militaries,” Christopher Ecclestone, a principal and mining strategist at Hallgarten & Company in London, told CNN shortly after Beijing announced the curbs on antimony exports.

Not surprisingly, shares of rare metal [producers are flying: Hunan Gold Corporation, one of the biggest antimony producers, has seen its shares gain 35% in the year-to-date while those of Perpetua Resources have nearly tripled over the past six months.

Rare Earths Deluge

Beijing has been doing everything in its power to maintain its rare earths hegemony with Chinese producers flooding the markets with rare earths and battery metals like lithium. This has inevitably led to price crashes, thus making it untenable for fledgling Western competitors to continue operations. To wit, lithium carbonate prices have crashed to CNY 75,000 ($10,530) per tonne, a far cry from their 2022 peak at ~CNY 590,000 ($82,850) and the lowest in over three years, amid increasing concerns of oversupply. Meanwhile, in Q1 2024,  NdPr oxide prices fell 47% Y/Y; dysprosium prices fell 20% while terbium prices were down 52%. NdPr–an acronym for Neodymium-Praseodymium–is used to produce the world’s most powerful and efficient magnets; dysprosium is used to make alloys for neodymium-based magnets while terbium is used in solid-state devices to dope calcium fluoride, calcium tungstate and strontium molybdate.

Last year, China issued three batches of rare earth output quotas, the first time it issued that many quotas in a single year since it started the quota system. The total quota for 2023 clocked in at a record high of 255,000 tons, good for a scorching 21.4% Y/Y increase. Since 2006, Beijing has controlled its supply of rare earths through the quota system.

“China is driven to maintain its market dominance. This is now a race,” Don Swartz, CEO of American Rare Earths (ARR.AX), has told Reuters.

In response, miners from Australia to Canada have been forced to cut production, pull back on investment plans and initiate layoffs. Even larger producers such as Las Vegas, Nevada-based rare earths miner MP Materials (NYSE:MP) and its Australian peer Lynas Rare Earths (OTCPK:LYSCF) (OTCPK:LYSDY) are barely hanging on, and their shares have crashed.

News Supply Chains

Thankfully, western rare earth producers are still fighting back: China Rare Earth Resources and Technology saw its FY 2023 net profit plunge by 45.7% to 417.67 million yuan thanks to pressure from upcoming western supply chains. A similar trend is being observed in the current year, with the company reporting that Q1 2024 revenue dropped by 81.9% to 301.55 million yuan, leading to a net loss of 288.76 million yuan, versus a net profit of 108.97 million yuan in the same period a year earlier.

China Rare Earth Resources has pointed out that “foreign countries are now proactively installing rare-earth supply chains independent from China,” highlighting endeavors in places such as the U.S., Australia, and Southeast Asia.

Some Western countries are rich in rare earths. To wit, Nordic countries, particularly Greenland, Norway, Sweden, and Finland, have large deposits of a variety of rare earth elements including cobalt, nickel, lithium and graphite, and nickel which remain largely unexploited. According to the Nordic Council of Ministers, the Nordic bedrock hosts over 43 million tons of economically viable deposits of rare earth minerals. Finland, Sweden, and Norway are among the top eight countries favorable for critical minerals and battery supply chain development as per Bloomberg New Energy Finance.

By Alex Kimani for Oilprice.com

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PJM Capacity Prices Rising Fast

Capacity prices in PJM soared in the recent capacity auction. (See my post  Ten times as expensive at PJM.)  The price rise will be reflected in higher bills for consumers. Consumer bills will not go up by a factor of ten, because capacity prices are only part of the bill. Still, there will probably be double-digit increases in people’s bills.

In the future, capacity prices are set to go even higher.

On July 29, Ethan Howland of Utility Dive looked at the probable outcome of the next capacity auction. “PJM capacity prices could jump 157% in the next auction: Morgan Stanley .“ The price rise in the recent auction started from a low base, going from $29 per MW-day to $270/MW-day.  The future rise will begin at the higher number.

As the Utility Dive article states: “almost every power plant in PJM cleared the last (capacity auction) so there was barely any excess capacity in the market.”  Lack of excess capacity means that a small increase in demand could lead to a large increase in capacity prices and consumer prices.

Looking forward, Morgan Stanley analysts say that if the same plants clear in future auctions, capacity prices could go up to $700 MW-day.  The analysts expect a modest rise (about 2%) in demand.  Demand will rise.  Supply will not increase. In consequence, prices will rise.

Will Efficiency Save PJM?

What about efficiency?  If PJM could stop that modest rise in demand, wouldn’t that solve the problem? Maybe. PJM has tried to give capacity payments to organizations that provide efficiency.  Paying for efficiency is part of a nationwide trend to encourage lower demand: virtual power plants, demand response, efficiency payments. These all provide payments for actions that could mean that less generation would be needed on the grid.

Okay. It’s time to dig a little deeper. We can start with the fact that the PJM efficiency payments may be illegal.

Bye-bye Efficiency

In July of this year, the Independent Market Monitor for PJM asked PJM to stop paying energy efficiency resources and recoup past payments. According to the Market Monitor, as reported in Utility Dive, PJM has been paying ineligible energy efficiency resources the capacity auction clearing price since 2016. Earlier in the year, group of state consumer advocates and U.S. Senators made a similar complaint about the payments.

How much money are we talking about? According to the article, PJM made capacity payments of about $120 million  to energy efficiency resources for 2024-25. As a percentage of the total capacity ($14 billion) that cleared in the last auction, this is pretty small potatoes. Still, $120 million staying in consumers’ pockets is $120 million in consumers’ pockets.

PJMs “addback” mechanism is a major part of the problem. PJM removed energy efficiency from its evaluation of available supply (capacity). But it continued to pay energy efficiency as sort-of capacity through its addback. PJM claims the addback avoids double-counting resources. The Market Monitor disagrees.

Here’s a quote from the Market Monitor’s July FERC filing.

When EE (Energy Efficiency) was added to the forecast and EE was removed from the capacity market, PJM should have simply followed the tariff, recognized that EE was not capacity, recognized EE resources do not meet the definition of EE Resources in the filed tariff, and eliminated payment to EE resources.

Instead, PJM recognized that EE resources are not capacity, stopped including EE resources in the capacity auction, and began to pay EE resources an uplift payment equal to the capacity market clearing price.…The rationale for continuing to pay EE resources as if they were a capacity resources was and is unclear. PJM never stated that rationale clearly. …..

The complete removal of EE resources from the capacity market mechanism would make it unnecessary to address the multiple outstanding issues related to the task of accurately measuring the impact of EE, determining the ownership of any imputed savings, ensuring that the same EE are not submitted by multiple participants….

Let’s move away from the Independent Market Monitor’s FERC filing and look instead at the PJM committees. On August 21, the PJM Markets and Reliability Committee voted to eliminate efficiency providers from the capacity market. The discussion and vote were carefully reported in the August 26 issue of Utility Dive. PJM Stakeholders Endorse Elimination of EE from Participation in Capacity Market.

It looks like nobody is happy with how PJM pays for efficiency.

Is Efficiency Holy?

It may come as a shock that anyone could vote against efficiency.  What could be better than investing in efficiency?

But that is the issue.  You need to invest in efficiency, and that means you need to

·      define efficiency,

·      monitor efficiency, and

·      compare it with other investments.

There can be problems with each of these steps.  I plan to give examples in a new post.

Source: Meredithangwin.substack.com

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For years, California has received extensive press coverage for its high cost of living and the most expensive electricity and fuel prices in America.

California’s increasingly high cost of living, housing, and transportation, coupled with an increase in crime, smash-and-grab robberies, homelessness, pollution, and congestion, has caused many people and companies to relocate to more affordable cities and states.

The California Policy Institute counted more than 237 businesses that have left the state since 2005. Among these businesses were eleven Fortune 1000 companies, inclusive of AT&T, Hewlett Packard Enterprise, Exxon Mobil, and Chevron. California’s net move-out number of residents in 2022 alone was more than 343,000 people that left California — the highest exodus of any state in the U.S.

Kamala Harris has a long relationship with California. She became the San Francisco district attorney in 2004. She served two terms in that role from 2004 to 2010. In 2010, she succeeded Jerry Brown as California Attorney General. She was sworn into the role in January 2011 and served until 2017, when she joined the U.S. Senate after being elected in 2016.

Kamala Harris continues to support California’s tax-and-spend, overreaching, and economy-crushing policies and their threats to America’s energy, agricultural, economic, employment, living standards, and national security future.

California’s de-carceration, de-prosecution, and de-policing have led to a toxic mix that has eroded public safety in the Golden State.

The growing number of smash-and-grab robberies on small businesses has another major associated cost: turning off the desire of shoppers to return to those stores that have been attacked and receiving press coverage that gets disseminated to others, giving the impression that the safety of the area is deteriorating.

The post Are Americans ready for Kamala Harris’s California cost-hiking, business-killing policies? appeared first on Energy News Beat.